Costs that rise and fall proportionately with the volume of output are often referred to as:
A)Variable costs.
B)Flexible costs.
C)Idle capacity costs.
D)Uncontrollable costs.

Question

Quizplus · Accepted Answer

Costs that rise and fall proportionately with the volume of output are known as variable costs. These costs vary depending on the level of production or sales, so they are also called directly proportional costs. Examples of variable costs include raw materials, labor, and supplies used in production.

Costs That Rise and Fall Proportionately with the Volume of Output